China is one of the few places I'm seeing significant potential on the long side at the moment. While commodities are obviously still in a secular bull market almost all of them have gotten extended above their moving averages and need to correct or at least trade sideways for a while. Add in the fact that the dollar may be setting up for a major rally and I don't see huge upside potential there yet.
The US markets seem to be mired in a trading range. Even if they did break out I don't see the stock market surging to huge new highs anytime soon. For that to happen the Fed would have to flood the world with more liquidity. That strategy has already ignited inflation. No I just don't see huge upside in the US markets at this time.
I've said before that bear markets create opportunity. One of the worst has been in the Shanghai stock exchange. The SSEC lost over 50% of of it's value during the recent 4 year cycle low. In my opinion that created one heck of an opportunity for those willing to see it.
I don't believe for one minute that China is in a bubble. China is expanding rapidly. For a communist country China has some of the best capitalists in the world. This growth is not going to go away. I'll tell you what else I like about China. The central bank is tightening interest rates trying to control inflation. That's a plus. While the US is busy squandering billions to police the world, ostensibly from weapons of mass destruction, China is busy buying the natural resources they need. It's much cheaper to just buy what you need than to try and take it by force.
The Shanghai index is one of the few markets that look primed for major moves up along with India and a few other emerging markets. Until the commodity markets are done correcting I think this is probably one of the markets with the most potential on the long side.